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CAH Stock Up Nearly 8% YTD: Will the Uptrend Continue in the Rest of 2026?
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Key Takeaways
Cardinal Health shares are up 7.9% YTD after gaining 74% in 2025 on strong execution.
CAH raised fiscal 2026 guidance after reporting 35% EPS growth in third-quarter results.
Cardinal Health is expanding specialty pharma, advanced therapies and higher-margin services.
After delivering a remarkable 74% gain in 2025, shares of Cardinal Health (CAH - Free Report) have climbed another 7.9% year to date, reflecting continued investor confidence in the company’s evolving growth strategy. The rally can be attributed to consistently strong earnings execution, accelerating specialty pharmaceutical expansion and growing contribution from higher-margin healthcare services businesses.
CAH stock has outperformed its closest peers, McKesson (MCK - Free Report) and Cencora, Inc. (COR - Free Report) , so far this year. Over the same period, shares of McKesson have lost 8.5%, while those of Cardinal Health have declined 19.5%.
On its fiscal third-quarter 2026 earnings call, Cardinal Health once again raised earnings guidance after reporting 35% earnings per share (EPS) growth, underscoring management’s confidence in sustained operational momentum. While macro uncertainties and pricing headwinds remain, Cardinal Health is increasingly transforming itself from a traditional pharmaceutical distributor into a diversified healthcare infrastructure company positioned to benefit from specialty medicine growth, advanced therapies and expanding outpatient care trends.
YTD Performance: CAH vs Industry & Peers
Image Source: Zacks Investment Research
Key Growth Drivers
Specialty Pharmaceutical Business Continues to Power Core Growth: Cardinal Health’s Pharmaceutical and Specialty Solutions business remains its primary growth engine. In the fiscal third quarter, segment revenues rose 11% to $56.1 billion while segment profit jumped 18%, significantly outpacing top-line growth.
Specialty revenues continue to expand above market rates, with management expecting specialty sales to exceed $50 billion in fiscal 2026. Growth is being supported by expanding manufacturer partnerships, specialty distribution and increasing penetration across physician practices.
MSO Platform Expansion Strengthens Competitive Position: The company continues to focus on expanding its physician-focused management services organization (MSO) platform, a key strategy to support long-term growth. Management highlighted continued progress with integrating Solaris into Specialty Alliance, helping expand multispecialty physician offerings.
This strengthens Cardinal Health’s downstream presence with providers while deepening relationships with manufacturers. As specialty drugs become increasingly complex and high-value, the physician networks should help drive durable growth through improved care coordination and service differentiation.
Advanced Therapies and Radiopharma Offer High-Growth Opportunities: Cardinal Health is aggressively positioning itself in next-generation therapies. Its recent 2026 Advanced Therapies report highlighted strong industry momentum toward moving gene and cell therapies into community-based care settings.
Simultaneously, the company significantly expanded Actinium-225 production capacity after already quadrupling output since late 2024. As targeted alpha therapies and radiopharmaceuticals are rapidly emerging as key oncology growth areas, Cardinal Health is building early leadership in this potentially multibillion-dollar market.
Adjacent Businesses Are Becoming Meaningful Profit Drivers: Beyond core pharmaceutical distribution, Cardinal Health’s newer healthcare businesses are scaling rapidly. The company reported 31% revenue growth and 34% profit increase in its “Other Growth Businesses” segment, driven by At-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics.
Particularly noteworthy is theranostics, where Nuclear and Precision Health Solutions delivered more than 30% growth, reflecting rising demand for precision medicine and oncology-focused diagnostics.
Estimate Revision Trend for CAH
Estimates for Cardinal Health’s fiscal 2026 earnings have moved up 16.5% to $10.76 per share over the past year, while the same for fiscal 2027 earnings has improved 17.2% to $11.98. The positive estimate revision depicts bullish sentiments for the stock.
Image Source: Zacks Investment Research
Competition Remains Intense as Rivals Expand Similar Specialty Strategies
Cardinal Health continues to face aggressive competition from McKesson and Cencora, both of which are pursuing similar specialty-driven strategies. McKesson delivered 18% adjusted EPS growth in fiscal 2026 while expanding oncology and multispecialty platforms, adding over 570 providers and strengthening AI-enabled supply-chain capabilities.
Cencora continues to invest heavily in specialty pharmaceuticals, oncology-focused MSO platforms and digital infrastructure through its OneOncology acquisition. Compared with peers, Cardinal Health currently stands out for stronger earnings momentum and faster scaling of high-margin businesses like theranostics and precision health, giving it a relative execution advantage entering the second half of 2026.
Valuation Outlook
Cardinal Health’s improving fundamentals have translated into stronger earnings visibility and guidance. Strong earnings momentum supports the stock’s performance and suggests that Cardinal Health remains attractively positioned relative to its historical growth profile.
CAH’s shares currently trade at a forward 12-month price-to-earnings (P/E) of 18.57X, higher than the industry average of 16.15X.
Image Source: Zacks Investment Research
Risks and Challenges Could Limit Further Upside
Despite strong momentum, several risks remain. Tariff exposure continues to put pressure on Cardinal Health’s GMPD segment, where profits declined due to adverse tariff impacts despite operational improvements. Growth in GLP-1 drug sales has moderated after prior strength, while Inflation Reduction Act pricing adjustments continue to hurt pharmaceutical revenue growth.
Rising competitive intensity in specialty distribution from McKesson and Cencora could pressure market share gains. Execution risk around scaling newer businesses, such as radiopharma and advanced therapies, also remains an important factor for investors monitoring the stock’s next move.
CAH’s Zacks Rank & Another Key Pick
Currently, Cardinal Health has a Zacks Rank #2 (Buy).
West Pharmaceutical, sporting a Zacks Rank #1 at present, reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
West Pharmaceutical has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.
View the Zacks #1 Rank List
Image: Bigstock
CAH Stock Up Nearly 8% YTD: Will the Uptrend Continue in the Rest of 2026?
Key Takeaways
After delivering a remarkable 74% gain in 2025, shares of Cardinal Health (CAH - Free Report) have climbed another 7.9% year to date, reflecting continued investor confidence in the company’s evolving growth strategy. The rally can be attributed to consistently strong earnings execution, accelerating specialty pharmaceutical expansion and growing contribution from higher-margin healthcare services businesses.
CAH stock has outperformed its closest peers, McKesson (MCK - Free Report) and Cencora, Inc. (COR - Free Report) , so far this year. Over the same period, shares of McKesson have lost 8.5%, while those of Cardinal Health have declined 19.5%.
On its fiscal third-quarter 2026 earnings call, Cardinal Health once again raised earnings guidance after reporting 35% earnings per share (EPS) growth, underscoring management’s confidence in sustained operational momentum. While macro uncertainties and pricing headwinds remain, Cardinal Health is increasingly transforming itself from a traditional pharmaceutical distributor into a diversified healthcare infrastructure company positioned to benefit from specialty medicine growth, advanced therapies and expanding outpatient care trends.
YTD Performance: CAH vs Industry & Peers
Image Source: Zacks Investment Research
Key Growth Drivers
Specialty Pharmaceutical Business Continues to Power Core Growth: Cardinal Health’s Pharmaceutical and Specialty Solutions business remains its primary growth engine. In the fiscal third quarter, segment revenues rose 11% to $56.1 billion while segment profit jumped 18%, significantly outpacing top-line growth.
Specialty revenues continue to expand above market rates, with management expecting specialty sales to exceed $50 billion in fiscal 2026. Growth is being supported by expanding manufacturer partnerships, specialty distribution and increasing penetration across physician practices.
MSO Platform Expansion Strengthens Competitive Position: The company continues to focus on expanding its physician-focused management services organization (MSO) platform, a key strategy to support long-term growth. Management highlighted continued progress with integrating Solaris into Specialty Alliance, helping expand multispecialty physician offerings.
This strengthens Cardinal Health’s downstream presence with providers while deepening relationships with manufacturers. As specialty drugs become increasingly complex and high-value, the physician networks should help drive durable growth through improved care coordination and service differentiation.
Advanced Therapies and Radiopharma Offer High-Growth Opportunities: Cardinal Health is aggressively positioning itself in next-generation therapies. Its recent 2026 Advanced Therapies report highlighted strong industry momentum toward moving gene and cell therapies into community-based care settings.
Simultaneously, the company significantly expanded Actinium-225 production capacity after already quadrupling output since late 2024. As targeted alpha therapies and radiopharmaceuticals are rapidly emerging as key oncology growth areas, Cardinal Health is building early leadership in this potentially multibillion-dollar market.
Adjacent Businesses Are Becoming Meaningful Profit Drivers: Beyond core pharmaceutical distribution, Cardinal Health’s newer healthcare businesses are scaling rapidly. The company reported 31% revenue growth and 34% profit increase in its “Other Growth Businesses” segment, driven by At-Home Solutions, Nuclear and Precision Health Solutions, and OptiFreight Logistics.
Particularly noteworthy is theranostics, where Nuclear and Precision Health Solutions delivered more than 30% growth, reflecting rising demand for precision medicine and oncology-focused diagnostics.
Estimate Revision Trend for CAH
Estimates for Cardinal Health’s fiscal 2026 earnings have moved up 16.5% to $10.76 per share over the past year, while the same for fiscal 2027 earnings has improved 17.2% to $11.98. The positive estimate revision depicts bullish sentiments for the stock.
Image Source: Zacks Investment Research
Competition Remains Intense as Rivals Expand Similar Specialty Strategies
Cardinal Health continues to face aggressive competition from McKesson and Cencora, both of which are pursuing similar specialty-driven strategies. McKesson delivered 18% adjusted EPS growth in fiscal 2026 while expanding oncology and multispecialty platforms, adding over 570 providers and strengthening AI-enabled supply-chain capabilities.
Cencora continues to invest heavily in specialty pharmaceuticals, oncology-focused MSO platforms and digital infrastructure through its OneOncology acquisition. Compared with peers, Cardinal Health currently stands out for stronger earnings momentum and faster scaling of high-margin businesses like theranostics and precision health, giving it a relative execution advantage entering the second half of 2026.
Valuation Outlook
Cardinal Health’s improving fundamentals have translated into stronger earnings visibility and guidance. Strong earnings momentum supports the stock’s performance and suggests that Cardinal Health remains attractively positioned relative to its historical growth profile.
CAH’s shares currently trade at a forward 12-month price-to-earnings (P/E) of 18.57X, higher than the industry average of 16.15X.
Image Source: Zacks Investment Research
Risks and Challenges Could Limit Further Upside
Despite strong momentum, several risks remain. Tariff exposure continues to put pressure on Cardinal Health’s GMPD segment, where profits declined due to adverse tariff impacts despite operational improvements. Growth in GLP-1 drug sales has moderated after prior strength, while Inflation Reduction Act pricing adjustments continue to hurt pharmaceutical revenue growth.
Rising competitive intensity in specialty distribution from McKesson and Cencora could pressure market share gains. Execution risk around scaling newer businesses, such as radiopharma and advanced therapies, also remains an important factor for investors monitoring the stock’s next move.
CAH’s Zacks Rank & Another Key Pick
Currently, Cardinal Health has a Zacks Rank #2 (Buy).
West Pharmaceutical (WST - Free Report) is another top-ranked stock from the broader medical space. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
West Pharmaceutical, sporting a Zacks Rank #1 at present, reported first-quarter 2026 earnings per share (EPS) of $2.13, which beat the Zacks Consensus Estimate by 26.8%. Revenues of $844.9 million surpassed the Zacks Consensus Estimate by 8.5%.
West Pharmaceutical has an estimated long-term earnings growth rate of 13.9%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 19.4%.